The importance of stable, clear and enabling regulation to enable property owners and infrastructure providers to work together successfully
Karen Warner, Head of Legal – Property, Cellnex UK
Following the introduction of the Electronic Communications Code (the Code) in December 2017, decisions on rental valuation from the Upper Tribunal (Lands Chamber) have primarily related to new rooftop sites in London. The publication of the latest decision from the Upper Tribunal this week, ‘On Tower UK Limited v JH and FW Green Limited’, therefore, marked an important landmark. This decision, for the first time, provides a guide for landowners and operators on the rents that are likely to be imposed by the Upper Tribunal on out of town sites and it confirms that, as old agreements expire, renewal agreements will bring lower rents in line with Government policy.
These sites, often rural, on the outskirts of towns and the edge of roads, provide the crucial connectivity to meet public needs and also drive economic recovery following the COVID-19 pandemic. For over two decades, Landowners have played a hugely important role in hosting these sites in return for rents that reflected mobile network operators’ need to move quickly to develop and then upgrade this essential national infrastructure.
Following extensive consultation, the Government introduced legislation to support the ongoing and significant investment of the industry, by reducing the price they pay to install infrastructure on private land. The decision this week confirms that Landowners will receive a fair price, in line and no less than they could receive from other uses of the land, and a price that reflects the rights the operator benefits from and compensates the landowner for their presence on the land.
The site, in this case, is in woodland on a private estate in a National Park. Access is over a long private road, and there are residential dwellings close to the mast. The Tribunal decided that these elements constituted special circumstances that inflated the adverse effects on the landowner and, as a result, imposed a rent of £1,200 per year. Were these particular attributes absent, the Tribunal suggested an appropriate rental level might be £750 per year.
The Tribunal decision provides much-needed clarity on what equipment and sharing rights are available to operators when seeking agreement. A provision in the Code (Paragraph 17) has created significant dispute across the professional community who advise landowners and communications operators. Landowners have often been advised to refuse terms that permit site sharing with other operators, and upgrade of infrastructure and equipment, unless it has no more than minimal adverse impact on appearance or causes no additional burden on the landowner. That action is at odds with the Government objective to facilitate the roll-out of new technologies and would bring dispute for years to come over whether the subjective tests are met. Government policy encourages site sharing to minimise the proliferation of masts and has been specifically recognised in the Code as a purpose which is supported by the statutory rights.
Judge Cooke explained the history of the Paragraph 17 provision, which was recommended to allow certain activities to take place without negotiation while the rents remained at previous market levels. She noted that the rationale for this ‘free activity’ has gone, now that landowners are to receive a ‘minimal’ rent. Within the Code, Paragraph 17 is a basic right infrastructure providers and network operators who enter into land agreements benefit from, even if the agreement is silent. It is crucial for these operators to have broader rights than this to ensure they can meet the fundamental aim of the legislation: the public interest in access to a choice of high-quality electronic communications services. The decision confirms that this should not be hard to establish.
During COVID-19, our reliance on mobile connectivity increased hugely, with mobile calls rising by 50 per cent, as we tried hard to work from home, educate our children and stay in touch with friends and family. It has become even more critical to speed up the deployment of our networks,enabling better connectivity for citizens and businesses and reducing digital inequalities relies upon deploying infrastructure, for which we need a stable, clear and enabling regulatory environment. The decision from the Tribunal on this case gives certainty and clear guidance and highlights that agreements between property owners and infrastructure providers reached quickly and on effective terms, play a crucial role in the critical digital roll-out for the UK.